Prelims: Polity- Electoral Bonds Schemes.
Mains: General Studies II,Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.
Why in the News ?
Electoral Bonds have been a contentious issue in Indian politics, particularly due to concerns about transparency and accountability in political funding. The recent decision by the Supreme Court to strike down the scheme as unconstitutional has sparked debates about electoral reforms and the role of money in politics.
Source: The Hindu
Key Facts 🗝️
- Introduced in The Finance Bill, 2017 during Union Budget 2017-18.
- Struck down as unconstitutional by the Supreme Court on February 15, 2024.
- Around 18,299 electoral bonds worth ₹9,857 crore were transacted between March 2018 and April 2022.
- The Electoral Bond scheme was amended on November 7, 2022, to increase sale days from 70 to 85 in a year.
About:
Electoral Bonds
- Electoral bonds serve as money instruments similar to promissory notes.
- These bonds can be purchased by both companies and individuals in India from the State Bank of India (SBI).
- The purchased bonds can then be donated to a political party, which can later encash them.
- Bonds are redeemable only in the designated account of a registered political party.
Electoral Bond Scheme
- Launched in 2018, the Electoral Bond Scheme aims to reform political funding in India.
- It was introduced to enhance transparency in electoral funding, aligning with the nation’s transition towards a cashless and digital economy.
Amendments Made in 2022
Additional Period Extension
- A new provision allows for an additional period of fifteen days specified by the Central Government during general elections to Legislative Assemblies of States and Union territories.
- Initially, bonds were available for ten days each in January, April, July, and October, as per government specifications.
- An extra period of 30 days was allotted during general elections to the House of People (Lok Sabha).
Validity Extension
- Electoral Bonds are valid for fifteen calendar days from the date of issue.
- Payments to any payee Political Party cannot be made if the Electoral Bond is deposited after the expiry of the validity period.
- Bonds deposited by eligible Political Parties are credited on the same day.
Eligibility Criteria
- Only political parties registered under Section 29A of the Representation of the People Act, 1951 (RPA, 1951) are eligible.
- Eligible parties must have secured at least 1% of the votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly.
Finance Bills
What are Finance Bills?
Finance Bills are proposed legislation introduced in Parliament by the government to outline its financial policies, taxation measures, and expenditure plans for the upcoming fiscal year. These bills play a crucial role in the budgetary process and are essential for the functioning of the government’s financial machinery.
Finance Bills typically contain provisions related to:
- Taxation: Including changes in tax rates, exemptions, and other fiscal measures aimed at revenue generation.
- Government Expenditure: Authorizing the withdrawal of funds from the Consolidated Fund of India to meet the government’s expenditure requirements.
Difference between Finance Bills and Money Bills
While both Finance Bills and Money Bills deal with financial matters, there are significant differences between the two:
Scope:
- Finance Bills: These bills cover a wide range of financial matters, including taxation, expenditure, and other fiscal policies.
- Money Bills: Money Bills specifically deal with matters listed under Article 110 of the Indian Constitution, such as taxation, government expenditure, and appropriation of funds.
Introduction and Approval:
- Finance Bills: Introduced in Parliament by the government, Finance Bills require approval from both houses (Lok Sabha and Rajya Sabha) and the President’s assent to become law.
- Money Bills: Only introduced in Lok Sabha, Money Bills can be enacted without the approval of Rajya Sabha. However, Rajya Sabha can suggest amendments, which Lok Sabha may or may not accept.
